The Bay Area is home to roughly 20 percent of the state’s population, 25 percent of the state’s $1.5 trillion in total adjusted gross income (AGI), and six of the ten highest median income counties in California. Since 2008, the Bay Area created nearly two-thirds of California’s 1.1 million additional jobs, resulting in nearly a quarter of all of California’s jobs being done in the region. Retail sales in the Bay Area also make up a quarter of the state’s total.

The Bay Area’s economic inequality is as staggering as its economic contributions to the state. According to the Bay Area Council Economic Institute (2020), “median household income increased by nearly $250,000 (or 87 percent) among households in the top decile in the region and by only $4,000 (or 36 percent) among households in the bottom decile between 2010 and 2019.”

The technology industry has been a driver of inequality’s growth. Companies developing cutting-edge technologies moved into the region for proximity to one another and to top-tier universities, such as the University of California, Berkeley and Stanford University. Venture capital soon followed: By 2016, around 40 percent of all capital ventured on startups went to Bay Area firms.

Bay Area technology firms moved away from computer manufacturing and into technology service provision (e.g., software and analytics) in the late 1990s, reducing the amount of low- and middle-skill occupations available to the region’s residents. The Information industry category grew from 2.9 percent of total Bay Area jobs in 1990 to 5 percent in 2017. Likewise, the Professional & Business Services industry grew from 13.6 percent to 19 percent.

During the same period, the manufacturing category decreased from 15.5 percent to 9 percent. The share of jobs in the information technology industry is also indicative of the ongoing shift toward services: In 1995, nearly 75 percent of all jobs in IT were manufacturing; by 2006, the proportions had flipped, with over 60 percent of IT jobs in services and only 30 percent in manufacturing.

The decline in manufacturing jobs corresponded with growth in Leisure & Hospitality as well as Education & Health Services, providing some insight into where manufacturing jobs went upon the industry’s contraction.